Turkish sovereign and bank bonds slide as political pressure rises

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LONDON, Nov 21 (Reuters) - Turkish sovereign and bank dollar-denominated bonds fell across the curve on Tuesday with some issues trading at multi-month lows, hit by worries about government pressure on the central bank and worsening relations with the United States.

Turkey’s 2030 sovereign issue was down around 0.7 cents according to Tradeweb, trading at its lowest level since March.

The sell off was broad-based, pushing up the average yield spread of Turkish sovereign dollar bonds over U.S. Treasuries by 6 basis points (bps) to 339 bps, also the widest level since March.

Turkish banks’ dollar bonds slipped as well, as investors fear possible U.S. fines on some of the country’s lenders as Turkish gold trader Reza Zarrab prepares to stand trial in the U.S.

Amongst the worst hit was Halkbank, whose February 2021 issue fell 0.65 cents according to Tradeweb, to trade at its lowest level since March.

Garanti Bank’s September 2022 dollar bond was down 0.3 cents to its lowest since April and Vakiflar’s November 2022 dollar bond was down 0.4 cents to its lowest since March. (Reporting by Claire Milhench; editing by Marc Jones)